J&F Mineração, the entity controlled by J&F Investimentos, will acquire the companies that hold iron ore, manganese ore and logistics assets in Vale’s Midwestern System
Vale has signed a binding agreement with private investment firm J&F Investimentos for the sale of its manganese and iron ore mines in Brazil, for an enterprise value of $1.2bn.
Under the terms of the deal, J&F Mineração, the entity controlled by J&F Investimentos, will acquire the companies that hold iron ore, manganese ore and logistics assets in Vale’s Midwestern System.
The Midwestern System assets are held by Mineracao Corumbaense Reunida, Mineracao Mato Grosso, International Iron Company and Transbarge Navegación Sociedad Anónima.
The system produced 2.7Mt of iron ore and 0.2Mt of manganese ore last year.
In addition, J&F Mineração will also purchase Vale’s logistics assets in the region, and absorb all the associated employees.
Vale is expected to receive around $150m upon closing of the transaction.
Also, it will transfer the obligations related to the take-or-pay logistics contracts, along with other liabilities existing in the assets, subject to the consent of the counterparties.
Closing of the transaction is subject to approvals from the Administrative Council for Economic Defense (CADE), the National Defense Council (CDN), and the National Agency for Waterway Transportation (ANTAQ) other regulatory authorities.
Vale said that the acquisition is in line with its strategy of streamlining its portfolio and focusing on the businesses and growth opportunities.
In a separate development, Vale has commenced construction on ‘green’ pig iron plant in Marabá, near its Carajás iron ore mine, using technology from its subsidiary Tecnored.
The new facility forms an important step in providing a viable technological solution for decarbonisation of the steel industry chain.
It will initially have a production capacity of 250,000 tons per annum of green pig iron, with plans to expand up to 500,000 tons per annum in the future.
The facility is anticipated to start commercial operations in 2025, with an estimated investment of around R$1.6bn ($336m) said the company.
Vale CEO Eduardo Bartolomeo said: “The implementation of Tecnored represents an important step in the transformation of mining, contributing towards an increasingly sustainable process chain.
“The Tecnored project is of great importance for Vale and the region and will provide competitiveness, environmental sustainability, and development to the region.”